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U.S. Stocks Extend Recovery On Upbeat Earnings, Economic News

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Stocks moved mostly higher during the trading day on Thursday, extending the upward move seen over the course of the two previous sessions. With the continued advance, the major averages have largely offset the steep drop seen on Monday.

The major averages gave back some ground in afternoon trading but remained firmly positive. The Dow climbed 214.66 points or 0.8 percent to 25,862.68, the Nasdaq jumped 75.90 points or 1 percent to 7,898.05 and the S&P 500 advanced 25.36 points or 0.9 percent to 2,876.32.

The strength on Wall Street partly reflected a positive reaction to earnings news from Walmart (WMT), with the retail giant climbing by 1.4 percent.

The advance by Walmart comes after the company reported fiscal first quarter earnings that exceeded analyst estimates on better than expected comparable store sales growth.

Networking giant Cisco Systems (CSCO) also surged up by 6.7 percent after reporting fiscal third quarter results that exceeded analyst estimates on both the top and bottom lines.

The markets also benefited from the release of a batch of upbeat economic data, including report from the Labor Department showing initial jobless claims dropped more than expected in the week ended May 11th.

The report said initial jobless claims slid to 212,000, a decrease of 16,000 from the previous week's unrevised level of 228,000. Economists had expected jobless claims to dip to 220,000.

A separate report from the Commerce Department showed a substantial increase in new residential construction in the month of April.

The Commerce Department said housing starts surged up by 5.7 percent to an annual rate of 1.235 million in April after climbing by 1.7 percent to a revised rate of 1.168 million in March.

Building permits, an indicator of future housing demand, also rose by 0.6 percent to a rate of 1.296 million in April after edging down by 0.2 percent to a revised rate of 1.288 million in March.

The Philadelphia Federal Reserve also released a report a significant acceleration in the pace of growth in regional manufacturing activity in May.

The upbeat news has offset trade concerns after President Donald Trump signed an executive order declaring a national emergency with respect to the threats against information and communications technology and services.

Sector News

Software stocks turned in some of the market's best performances on the day, resulting in a 2.1 percent jump by the Dow Jones U.S. Software Index. The index continued to rebound after ending Monday's trading at its lowest closing level in over a month.

Significant strength also emerged among chemical stocks, as reflected by the 1.8 percent gain posted by the S&P Chemical Sector Index. With the advance, the index climbed further off the three-month closing low set on Monday.

Transportation, banking, and retail stocks also saw considerable strength on the day, while semiconductor and gold stocks bucked the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slid by 0.6 percent, while China's Shanghai Composite Index rose by 0.6 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index surged up by 1.7 percent, the French CAC 40 Index jumped by 1.4 percent and the U.K.'s FTSE 100 Index advanced by 0.8 percent.

In the bond market, treasuries gave back ground after trending higher over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.6 basis points to 2.405 point.

Looking Ahead

Trading on Friday may be impacted by reaction to U.S. economic reports on consumer sentiment and leading economic indicators.

On the earnings front, Applied Materials (AMAT), Nvidia (NVDA) and Pinterest (PINS) are among the companies releasing their quarterly results after the close of today's trading.

Agricultural equipment maker Deere & Co. (DE) is also scheduled to release its fiscal second quarter results before the start of trading on Friday.

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